Awareness of Misery
From now on poverty will be fought at the highest official level, precisely by launching a comprehensive national program aimed at securing the “Strategy to Overcome Poverty” adopted by the president this August. The program covers eight years (2001-09) and its implementation is supposed to lower the officially registered poverty level by 5%. The project is made up of three stages and is geared to “provide the able-bodied population with conditions to independently solve the problem of increasing their welfare, balancing labor market demand and supply, and preventing unemployment.”
Every stage contains many planned indices. Thus, the official subsistence level, currently at 14.7%, is to drop to 8%, and by the end of the program the current poverty line of 26.4% will encompass 21.5%. The strategy also envisages an increase in the employment rate and incomes thus earned, which in turn is supposed to stimulate business and provide the unprotected strata with social protection.
Awareness of the problem is, of course, a noticeable step in the direction of its being settled, says Kateryna Mykhailenko, head of the parliament’s employment and social aid secretariat, adding that the stated parameters are “humble” and cannot fundamentally improve the situation. The program’s main task is to secure employment opportunities, thus lowering unemployment. This in itself will ease the burden on the state budget, depending on how much lower the amount paid to low-income families can really become, regardless of their quantitative indices.
Oleksandr Stoyan, chairman of Ukrainian Labor Union Federation, also says he can appreciate only the program’s idea and not the project as such, because he cannot see how it will be actually implemented. After analyzing the 2002 budget bill’s social guarantees, he is convinced that “it offers nothing to overcome our poverty.” In addition, the Strategy reads that the poverty line is a citizen’s aggregate income lower than 56.7% of the living wage. However, the latter is set at UAH 362 in 2002, for the able-bodied and employed citizenry, meaning that the poverty line starts at UAH 176 [a month], meaning that the government proposes a minimum wage below the poverty line next year.
It is also clearly apparent that the program’s main task is not so much in outlining various initiatives, as in allowing the able-bodied to lawfully earn more than a living, so that they can live, not just survive.
Yury Sayenko, head of the social examination department of the Ukrainian National Academy of Sciences Institute of Sociology, believes an antipoverty program must have a regulatory and corrective function, not contain just so many guidelines; it can actually be a tactic, not a strategy. “This program cannot precede a powerful economic program; it must follow it, so I consider its elaboration and enactment somewhat premature,” he says.
Also, it teems with discrepancies. On the one hand, Verkhovna Rada establishes the poverty line at UAH 344; on the other, the subsistence level is set at UAH 177. The logical question arises of where to refer all those people hanging between these two indices.
Dr. Sayenko believes the poverty problem must be solved not at the government level but at the regional one. Also, the recommendations and findings supplied by sociologists should be heeded, because sociological evaluations and official statistics often contradict each other. The latest polls show that 70% of Ukraine’s residents consider themselves living at or below the poverty line, while official statistics give 27%.
Demyan Bohynia, head of the labor economics, demography, and living standard department of the National Academy’s Institute of Economics, is convinced that the time has come for this program, because Ukraine’s living standard as such makes one “ring the alarm.” Over the past several years, the ratio of wages and pensions has dropped four times, yet the expert singles out quite a number of the program’s shortcomings. In the first place, the project does not take into account the specifics of economy’s transition status, and that the people’s income shows a trend toward increasing polarization especially over the past several years (the main thing is to correct the income imbalance not by lowering the incomes of the wealthy but by increasing those of low-income strata —Ed.). He believes the greatest disadvantage of the program is that most of its provisions are declarative rather than capable of being implemented; it fails to contain any complex of measures designed to overcome poverty, nor does it outline ways to raise the real sector’s efficiency.
Apart from the criticism already coming in from all sides, the program is in for financial problems. It is expected to be state financed; in other words, carrying it out will require (a) increasing budget revenues (increasing the tax burden on all those legitimately employed) and/or (b) cutting budget expenditures, something highly unlikely given the approaching elections. One can only hope that the stated strategy will not be yet another exercise in bureaucratic paper shuffling, vaguely formulating measures to overcome poverty and raise the minimum wage without solving the main problem: providing the conditions under which well-paid jobs can be done well and legally, while helping all those who cannot take such jobs for a variety of objective reasons. Otherwise poverty could turn into a choice consciously made by those unwilling to do any work whatever.
